Years ago, I found myself sitting in law school in Moot Court wearing an oversized itchy blue suit. It was a horrible experience. In a desperate attempt to avoid anything like that in the future I enrolled in a tax course. I loved it. I signed up for another. Before I knew it, in addition to my JD, I had a LL.M Taxation. I needed only to don my cape…. taxgirl® was born. Today, I live and work in Philadelphia, PA, one of the best cities in the world (I can't even complain about the sports teams these days). I landed in the City of Brotherly Love by way of Temple University School of Law. While at law school, I interned at the estates attorney division of the IRS. At IRS, I participated in the review and audit of federal estate tax returns. I even took the lead on a successful audit. At audit, opposing counsel read my report, looked at his file and said, “Gentlemen, she’s exactly right.” I nearly fainted. It was a short jump from there to practicing, teaching, writing and breathing tax.

House Committee Gunning For Criminal Charges In IRS Scandal

After months of debate about the exact role of Internal Revenue Service employees and management in the tax exempt scandal that rocked the agency, the House Oversight and Government Reform Committee has announced that it will engage in more debate.

Chairman Darrell Issa (R-CACA) announced that the Committee will discuss a resolution to approve a contempt order for Lois Lerner, the ex-Director of Exempt Organizations for the IRS. The order alleges contempt of Congress for Lerner’s refusal to answer questions about her role in the scandal. The resolution will be considered this Thursday, April 10.

You can read the draft contempt order here (downloads as a pdf). If you don’t wish to read through the whole thing, here’s what you need to know: it took the drafters 21 pages to get to “In short, Ms. Lerner has refused to provide testimony in response to the Committee’s duly issued subpoena.” Maybe not so short, guys.

For his part, Chairman Issa simply said that Lerner had “left the Committee with no alternative but to consider a contempt finding.”

Last month, the Committee released a report entitled “Lois Lerner’s Involvement in the IRS Targeting of Tax-Exempt Organizations.” The report was cobbled together from “e-mails, documents, and other testimony about her role in targeting and efforts to mislead investigators about improper conduct” since Lerner did not actually testify. Even without her testimony, the Committee believes they have some significant information on Lerner. You can read the 142 page report here (downloads as a pdf). Yes, 142 pages.

Darrell Issa (Photo credit: Gage Skidmore)

I get that no one is a big Lerner fan at the moment. Her behavior has contributed to a lot of head scratching beginning with the “did she or didn’t she?” plant accusations followed by her mind-blowing “I’m not good at math” excuse. At some point, however, neither IRS nor Issa’s Committee can blame a years-long scandal on one person. They are, however, apparently trying their darnedest.

And despite the cries that IRS has been slow-walking through the investigation, consider this: a resolution (!) concerning whether Lerner had waived her Fifth Amendment privilege on May 22, 2013, was approved on June 28, 2013. That was nearly 10 months ago. And we’re just now getting to debate another resolution. Interesting sense of timing, no?

As to the specifics of Lerner’s behavior, while the Committee feels pretty confident that they’re right on this one, not every one is so sure. For every lawyer and legal scholar who says she did waive the privilege, you’ll find one who says she didn’t. That’s significant because Fifth Amendment rights are something that we take pretty seriously in this country and hopefully, the debate around the issue will center on the Constitution and not on politics.

If you’d like to see how the Committee considers these matters up close and personal, you’re in luck. The April 10 proceeding will be open to the public.

After April 10, the process gets a little tricky. The Committee would then send the matter to the full House of Representatives for a vote. Assuming that the contempt charge gets through the House (and that’s a huge assumption), the matter would then move to a grand jury. Civil actions against Ms. Lerner are possible, but the Committee is clearly gunning for criminal charges.

If Lerner is found guilty of contempt of Congress, it would likely be considered a misdemeanor under 2 U.S.C. §192 and subject to a fine between $100 and $100,000. She could also be subject to “imprisonment in a common jail for not less than one month nor more than twelve months.”

In other words, this is serious stuff. It’s also great political theatre which is no doubt why it’s happening (notice how we’re not talking about tax reform anymore?). Keep watching.

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Why do you think they are only trying to blame 1 person? She was the head of the department and pleads the 5th. If there was no scandal, what would she have to hide? If she won’t answer any questions, who would you recommend they talk to next?

blwwins, To be clear, I am not suggesting that Lerner should not talk to Congress. I do think she knows more than she’s saying and I do think that she should be more cooperative. What I am suggesting, however, is that in the race to find the truth (which I agree is important), we shouldn’t trample any legal rights or settle for scapegoating.

I’ve worked for the irs and tas for 26 years. I fail to understand how people think this woman should go to jail because she headed an area that got overwhelmed with applications & then didn’t take enough action to get more revenue agents to help. They can’t just pull people out of the mail room or off of the customer service lines to handle the research to see if these groups qualify for the tax exempt status. The bottom line is about 100 revenue agents in 1 service center in the country work these cases so how do 100 people now handle 3000 cases in 1 year and so many of these groups failed to provide the proof they were asked to provide. So maybe she knows something. I know that I have never ever once seen a single email telling me to review my cases and turn in any tea party connected ones so it is not an agency wide issue.

congress put no one in jail for the massive wall street fraud perpetrated on the country and taxpayers, bailed them out without asking if taxpayers even wanted that, but people are out for this lady’s blood because applications (for groups that don’t want to follow the 501 c 4 rules anyway) were delayed in getting approved to be considered a valid charity org?? We have been trained now to get the exempt org cases since January. I have seen exactly zero come in so far so why aren’t these groups asking for the 1st place they are supposed to go to in order to get help with irs delays??

agreyday: She should go to jail not because she had an difficult job anthough I am sure there were problems due to increased volume.

These criminals targeted only one political ideology. For 23 months NO conservative applications were approved. Over a hundred were held simply because of the name of the organization. During that period “dozens” (according to ways and means and IG reports) progressive applications were approved.

Obama’s own campaign structure conversion (organizing for action) was processed during this period in less than a week personally approved on Sunday by Lois Lerner and given RETROACTIVE certification.

You remember this C4, right? these were the people who brought us the Joe Soptic ad.

There are now emails showing her colluding with democratic congressmen and the FEC inappropriately about prohibited topics. She is on video saying telling subordinates that they are expected to undo the damage done by the court rulling.

Still less than 5% of her correspondence has been turned over and she refuses to testify.

The people she blamed in Cincinnati for “making these mistakes” testified that they were following directions. The person in DC (Carter hull) who was supposed to determine them said they were routine and he knew what should be done but Lerner took them away from him and sent them to Wilkins where they say unprocessed for over a year.

There is no testimony of load related delays from the actual groups which normally handled them or the individuals which make them up because Lerner diverted them.

There is no explanation why only conservative groups were found to be overwhelming and the progressive ones were not affected by the onslaught of applications. Which by the way were fewer than the year previous to the start of the scandal.

Marv, thanks for your comments. While it is true that overwhelmingly, conservative groups were targeted, it is also true that progressive groups were also targeted. There were progressive terms on the BOLO lists (http://www.forbes.com/sites/kellyphillipserb/2013/06/25/congress-clashes-over-conspiracy-theories-political-agendas-as-irs-targeting-appears-to-include-progressives/) though, admittedly by far, there were more conservative terms. It’s also worth noting that, proportionately, more conservative groups submitted apps, too, following Citizens United.

The TIGTA report is interesting reading if you have some time: it’s 54 pages. (http://www.treasury.gov/tigta/auditreports/2013reports/201310053fr.pdf)

My take on the reaction has – and continues to be – that it was more lazy than criminal (http://www.forbes.com/sites/kellyphillipserb/2013/05/13/congress-and-the-president-want-you-to-get-mad-at-irs-over-tax-exempt-targets-just-not-at-them/).

Your knowledge of this story is what you have been led to believe by the news media. It is not true that for 23 months no conservative apps were approved. You are 100% wrong. Progressive and liberal groups apps were also delayed but since there was no sheer volume of them as there were with conservative apps there isn’t a big stink about it. I know more about what a c4 is then you will ever know in your lifetime.

Lerner can not take work back and delay it from dc national office. She has no authority to do that. When they are done in dc then it goes back to the area. It would be like you pulling over a cop and giving him a ticket for running a red light.

It was a flawed investigation from the start. It was issa asking the tigta insp general to ONLY investigate cases of delayed conservative political groups applications for tax exempt status. That is the 1st problem, it is biased and 1 sided and in my educated opinion as an irs worker, these groups do not qualify under the tax law they are applying under. The law needs to be rewritten to remove the word “primarily” when it refers to social organizations IF the congress wants these political groups to qualify as a c 3 or c4. The workers were doing their jobs which is very research intensive. They were inundated with work on top of the regular work they already had under every other type of 990 application.

The head of the division does not warrant going to jail over this Unless she did pull applications and have them delayed by sending them somewhere. I will say that I frequently have to send cases out for technical and tax law assistance and those cases then get bogged down a little as they are researched.

I did not see a single email asking us to search our cases and pull any conservative tax exempt apps. Whenever there is a pending court case or Fraudulent preparer scheme we get emails saying to pull the cases and follow specific guidelines.

People physically could not do the amount of work they currently had even with overtime. Now that commissioner Werfel said these groups can self certify they all got their status. It should disturb you as a taxpayer that groups that knowingly take charitable status and then break that law they applied for it under, (by doing nothing but doing political activities) are getting away with it.

Congress needs to change the wording of the law. Congress makes the tax laws and the irs enforces them. This is a congressional created problem that overwhelmed an area of the irs. The only reason congress cared is because they could turn it in to discrediting the agency that will carry out the penalty enforcement actions of the affordable care act. This is a political grandstanding issue that is not helping anyone.

Following your logic that she deserves jail time as the head of the exempt org group I await seeing the heads of gm and Toyota going to jail for the deaths they caused by not recalling their cars in time. I await seeing the head of the Virginia chemical company going to jail for contamination the water supply for the cancers the residents will come down with in the future. These criminals will never go to jail.

Kelly, first I want to thank you for your work. I have read another piece you have written as well and am left with the impression that you attempt to be balanced. Whatever your access to information is, I am satisfied that you attempt to not further skew the picture when you write. I appreciate this. It seems too rare to me.

Second to address a couple points, I understand from what I have read previously and from the recent comments by Dave Camp that the progressive groups were fairly quickly determined. I understand that no new channels were developed to deal with processing the applications and in all cases these were scrutinized for reasons other than their names. The emerge groups were as I understand already determined as non compliant c4s and were applying for temporary continued status while a 527 conversion was taking place. Acorn affiliates were of course reorganizations of already with problematic histories. The same is true of course of the occupy groups. These were all organizations with history and compliance issues. Still they were determined. The Israeli group once mentioned has also sued for the same reason. Message based issues which differ from the administration leading to scrutiny.

As for the older bolos. It is my understanding that these groups (7) with progressive names were all approved in normal time frames through normal channels so the fact that they appear on a bolo list is really probably not comparable if ultimately they were not refused or delayed. The IG addressed this after the criticism of his report and I think stated that these were not mentioned when he investigated, after he followed up later he determined this is probably because they were approved normally despite appearing on the list.

Do you suggest that laziness explains the release of the donor records of NOM to the Human rights campaign? Did it cause the inappropriate communications between Lerner and the FEC? Did it make it ok for the IRS to supply info to a congressmen from MD about a Texas citizen? What about the comments Lerner made that “everyone is screaming for us to fix it before the election” Seems a clear statement of motive to me, how do you read it?

Hull testified that the applications were straightforward and he did not ask for help, but they were pulled from him. At least that is my recollection. Do you remember something different?

Yes of course I read the IG report as well as almost everything that has been released. The process has been long and I do not generally go back as the perversion of this story is adjusted, so you may need to correct or refresh me on something I may have omitted but…were there any complaints at all from progressive groups?

agreyday: the Hull testimony is on YouTube. I suggest you watch it or maybe just get the highlights/cliff notes on the house oversight and reform website.

Then perhaps you may wish to explain why if you dispute the claim that Lerner removed these applications and re routed them, this 48 year expert at these determinations would testify that she developed the “multi -tiered” process specifically for these groups which took them from the normal approval to languish.

You are right that it wasn’t 23 months without a conservative application being approved though, I apologize for the typo. It was actually 27.

By the way, if you wish to characterize this as if it were coincidental and progressives were targeted too, how about you tell me as someone who knows more about 501s than I will ever hope to…what the difference between “Historical” and “emerging issues”?

As for your concerns regarding those crooks which previously evaded prosecution justifying none in this case….are you serious? Do you really advocate lawless society because every jaywalker doesn’t get fined?